Ontario paying penalties to Bombardier

The back-and-forth decision-making involving the fate of Toronto's Scarborough Line rehabilitation has cost Ontario at least C$68 million (US$65 million) in contract costs, including penalties, claimed by Bombardier Transportation, a Bombardier spokesman told Railway Age Monday, Oct. 28, 2013.

Earlier this month the Toronto City Council voted to endorse revamping the Toronto Transit Commission's (TTC) Scarborough Line as an extension of the city's subway system, marking a political victory to Toronto Mayor Rob Ford, a vocal foe of streetcars and light rail transit.

The move has thwarted Bombardier's scheduled production of 182 light rail transit (LRT) cars, which Bombardier Transportation Director of Communications and Public Affairs Marc Laforge said can be "directly attributable" to the change in plans for the Scarborough Line, which lies east of downtown Toronto.

"We have received some compensation, [including] C$3 million in extra costs for redesigning and engineering, and also an advance payment of C$65 million because some specific milestones were not reached," Laforge said.

Laforge late Monday added that the C$65 million was a "progress amount we've received for work that has been done, which we have not delivered yet" due to Toronto's changing plans, in essence an "advance payment" and not a actually a penalty.

Canadian Member of Parliament Frank Klees last week called attention to mounting penalties Ontario province must pay Bombardier Transportation, claiming the province owed Bombardier $70 million.

Laforge noted the "contract was signed in June 2010. In 2013, we haven't produced a single car yet," stressing, "The reason is totally out of our control." Laforge noted the contract had penalties in place "for both parties," as is often standard.

The problem does not involve Toronto's order from Bombardier for 204 low-floor vehicles to resupply and upgrade Toronto's existing streetcar network, Laforge said. Flexity testing on Toronto streets now is ongoing during daylight hours, as well as at night, he added.

Metrolinx, the agency overseeing transit in the Greater Toronto and Hamilton Area, last month affirmed its intent to advance two other LRT extension projects in Toronto, notwithstanding the decision. Laforge said it remained possible that some cars in the 182-car order could be delivered to those lines, or to other LRT projects getting under way in Ontario. Bombardier last summer signed an agreement with the Regional Municipality of Waterloo (Ontario) to supply at least 14 FLEXITY Freedom light rail vehicles, to serve the planned LRT system, initially serving the cities of Kitchener and Waterloo, Ont.